Arla Foods to acquire British organic dairy brand Yeo Valley Dairies

Food acquisition news : Dairy manufacturer Arla Foods has agreed to acquire British organic dairy brand Yeo Valley Dairies from Yeo Valley Group for an undisclosed price, in a move to significantly grow its organic dairy business in the United Kingdom.

Arla Foods Acquisition of Yeo Valley Dairies

Arla Foods acquisition of Yeo Valley Dairies will give the former an intellectual property license to use the Yeo Valley brand in the UK for milk, butter, cheese and spreads.

Right now, organic milk makes up a mere 4% of all the milk sold in the UK fresh milk market, says Arla Foods. This is well behind the likes of Denmark (29%), Sweden (16%) and Germany (10%).

Arla Foods is aiming at increasing the consumption of organic dairy products across the UK through the acquisition of Yeo Valley Dairies, which would be subject to clearance from the UK Competition and Markets Authority.

The Denmark-based dairy cooperative says that currently one in four homes in the UK are buying organic products, which gives hopes to the UK dairy sector to grow further by converting more of its customers from buying standard to organic dairy products.

To drive this growth and cope up with the increasing needs of consumers, Arla Foods says that investment is required in both innovation and range under the Yeo Valley and Arla organic dairy brands.

Commenting on Arla Foods acquisition of Yeo Valley Dairies, Peter Giortz-Carlsen – Executive Vice President and Head of Europe in Arla Foods, said: “The potential for organic dairy products in the UK is significant, and our investment in range through this licensing agreement with Yeo Valley provides a significant opportunity to offer a greater choice to consumers at attractive prices.

“Our ambition is to encourage customers in the UK to trade up from standard to organic milk, butter and cheese, driving overall growth for organic across dairy categories.”

Excluded from the transaction are the Yeo Valley yogurt, cream, ice cream and desserts business, which will continue to be independently operated within the Yeo Valley Group, which in turn is owned by the Mead family.

Tim Mead – owner of the Yeo Valley Group, commenting on Arla Foods acquisition of Yeo Valley Dairies, said: “Arla’s farmer-owned credentials are aligned to the values and ethos that the Yeo Valley brand is based on – “Supporting British Family Farms”. We have a long-held ambition to grow organic dairy in the UK.”

Recently, Arla Foods said that it will make an investment of €527 million this year towards delivering its 2020 growth ambition. The global dairy manufacturer plans to use the investment in new, expanded and enhanced production capacity and also on innovative technology.

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